August 19, 201610 yr What about property tax? Can that be deducted? It typically already is each year.
August 19, 201610 yr Still a cool story. Would she have to pay capital gains? not if she bought another house for a higher price.
August 19, 201610 yr I was in Santa Monica this past week. We had dinner at some trendy restaurant in town. I mentioned to my buddy that the area was a dump and I'd never be able to park my truck in street or the driveways since there is no room. So we checked out Zillow. The house I was ripping on was listed at $1.7MM total piece of junk with busted sidewalks and an area that almost seemed sketchy to me. It's crazy out there. Hardly any of my co-workers own homes out there. They all rent. So someone owns them and they just keep getting richer!
August 19, 201610 yr Author not if she bought another house for a higher price. That tax law has been changed. You used to be able to defer cap gains taxes if you bought a more expensive house within two years. They simplified it (maybe 1997?) and just gave a $250k/$500k exemption based on how you file. UKMF's formula looks right to me based on current tax laws. Note: I am not a tax attorney nor a CPA so that this FWIW.
August 20, 201610 yr That tax law has been changed. You used to be able to defer cap gains taxes if you bought a more expensive house within two years. They simplified it (maybe 1997?) and just gave a $250k/$500k exemption based on how you file. UKMF's formula looks right to me based on current tax laws. Note: I am not a tax attorney nor a CPA so that this FWIW. Did Obama do Jan any favors in creating the law?
August 21, 201610 yr Yes, a whole hell of a lot of them too. Unless something has changed in the past year or two with how it's calculated, I believe it'd be.... $3,900,000 sales price - $250,000 profit exemption - $55,000 initial capital investment = $3,595,000 of taxable capital gains. :eek: You'd also be able (I believe) to deduct any improvement costs incurred over the life of the home. Read the last line everything you said is correct
August 21, 201610 yr What law? Should have said changed the law. I thought he altered capital gains allowances like he did inheritance laws?
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